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Hydro One: explaining the unexplainable

Many puzzling over their Hydro One bills might head for the distribution company’s website where, Parker Gallant says, they will be no farther ahead.

It was shortly after Ontario’s Auditor General Bonnie Lysyk, released her damning report on “smart meters” when Energy Minister Bob Chiarelli suggested she got it wrong because “The electricity system is very complex, it’s very difficult to understand.”

Maybe Mr. Chiarelli will say the same thing about the recent “Understand my Bill” posting on Hydro One’s websit, as it misses the mark in several ways. It is seven pages long (should you print it out) which is an indication of just how “complex” the Liberals have made things for electricity consumers.

Here are a few questions:

Why does Hydro One describe their “typical residential customer” as a user of 800 kWh per month but when applying for rate increases they use 1,000 kWh per month?

Why are two (2) charts missing from the website?

Why does the pie chart, “how the money is spent” have “replacing worn out equipment” in one slice and “new or higher rated equipment” in another slice?

Why does the pie chart claim 3% is for administration expenses when their filing with the OEB for the Yearbook of Distributors for 2013 indicates it is 23% of all expenses for their distribution business?

Why is the “Three column chart showing how delivery charges are calculated” missing?

Why does the chart, “A breakdown of your bill” indicate there are only “Over 400 generators” while the OPA/IESO indicates there are over 23,000 contracts?

Why does this chart indicate HST is 12% when it is actually 13%?

Why does the text following the heading “How we deliver electricity” suggest “electricity is created by harnessing other power sources like windmills,” and go on to say “or burning coal across the province”? Is Hydro One unaware that the coal plants have been shuttered?

Why do they claim they have $22 billion in equipment and later on indicate they have spent $7.3 billion in the last three years indicating they would fully replace all their equipment over a nine-year time span but still claim their focus is “on maintaining the performance of our aging infrastructure?” Aren’t most transformers built to last 30 years?

Under “Frequently asked questions” why do they use the smallest recent rate increase in the chart subtitled “How much will my bill increase” which varies from a low of .01% to a high of 7.8%?

Why under this same section the question posed is: “Why are my residential delivery rates increasing? I was told they were going to be reduced” and the answer provided is: “We’re sorry for the confusion. When we applied to the OEB we thought delivery rates would be reduced for a typical residential medium density customer who uses 800 kWh a month.”Why would they suggest that, knowing they applied for a rate increase, and exactly who did Hydro One tell rates were going to be reduced?

Following this and another question the site launches into a confusing array of combining TOU increases and delivery rate increases suggesting increases were effective January 1, 2015 but they are not going to be implemented until May 1, 2015 but an eight-month adjustment period will occur to catch up for the missing increases.

Is it perhaps too much to ask that those 70% of Hydro One employees on the Sunshine List to understand what they are billing their 1.2 million customers?

Minister Chiarelli should provide all Ontario ratepayers with an explanation but I suspect he will repeat that it is too complex to understand.

Comments

Let’s look at a few other things re Hydro One. They have to build new, higher rated transmission systems on what were, previously, rural low load transmission systems, to accommodate the new wonderous wind and solar techonolgy mandated by our dear Liberal Government. The hydro rate payer has to pay for these up grades, not the benevolent wind/solar companies.
They have to replace transformers connectiing hugh voltag (115 kv and 230 Kv) nteworks to those rebuilt low trension networks (28Kv and 44Kv) with new transfomers. The previous transformers were designed as a one way system feeding from the high voltage to the low voltage. Our dear Liberal Government has madated large quantities of lovely green energy must be produced requiring the capability of these transfomers to flow both ways. The hydro rate payer has to pay for these up grades, not the benevolent wind/solar companies.
SMART meters were mandated by the Liberal Government as a result of the recommendations of the non Hydro One, Market Design Committee of the late 90’s (ever heard of that one). Who ever designed the new technology got it all wrong, and it wasn’t Hydro One.
I could go on. Hydro One works at the whim and will of the Liberal Government. Hydro One does not set policy, does not produce electricty and yet, is a scape goat for the Liberals and all they’re buffoonary. Instead of targeting Hydro One and its employees, get off the band wagon and go after the real problem child…THE LIBERALS!!

Yes, I was an Ontario Hydro employee, and displaced due to the break up of Ontario Hydro, now attached to Hydro One (and NO, I’m not on any Sunshine list). We were badgered by the press and public in the 80’s for similar stuff that we had no control over, and indeed, Hydro One still has no control over, so let’s lay off and go to the real culprit.

Couldn’t have said it better myself John -it’s amazing that people don’t seem to understand this. The liberals love to hear the masses blame Hydro One
for the liberals screw ups – it’s a great distraction from them.

Good insights John. Thanks for taking the time to share that. I do appreciate Parkers work, but understand that he’s “dancing at two weddings” between WCO and Energy Probe. Not always concurrent interests.
The Liberals are no doubt setting up Hydro One, as they have done with OPG as well. That’s the first rule in politics..if you want to make big changes that may not suit the public interest you need to create a strawman to blame. Coal worked for the GEA. Now supposedly disfunctional public assets, that should be sold to the private sector.

It seems that with all of the complexity of the electricity power system, it’s easy to hide the sorts of details that a rare person like Parker can analyze and expose to the public.
Obfuscation is a well known tactic used to make it very challenging for others to discover the raw facts.
Clarity is crucial in this situation.

Like it or not, the power system and this whole decbale is confusing, not simple as you suggest. Gallant isn’t some wonder drug to appear on the scene. He does have a handle on finances, but his handle on the technicals of the power system and who is doing what and the history leading to this point is miniscule

Did the Liberals mandate, along with all the other alleged Hydro One screw-ups on Mr. Gallant’s list, that the HST be shown as 12% instead of 13% on the chart?

No, you’re giving the useless Wynne government and the incompetent Chiarelli way too much credit. They couldn’t possibly have concocted such a brilliant scheme to discredit Hydro One. They must have had some help …

Clarity is not synonymous with simplicity.I recognize that the energy issues the world over are associated with major economic interests.

Is it possible that there is organized obfuscation between Hydro One and the Liberal government?

I’ve seen this in other contexts where the end result is to give the public the impression that there is nothing they can do about the deleterious situation they face because “it’s all too complex”. The average person submits to ‘authority’ more easily when they feel powerless to interact with “complexity”.

I see where you’re line of thought is going, and I don’t totally disagree, However, I’m not convinced that is happeniing at this time. Having kept in contact with a number of people I’ve worked with, power system dispatchers for a simple term, they are not happy about what is happening on the whole Liberal energy situation. The word has been “please get rid of the wind and solar”. These people are subject to the same billing nonsense as the rest of us. There is no special compensation for them, or any line man you see on the street. What is happening at the upper echelons under the table , so to speak, may be a different story.
What has been missed that comes directly into your view is the sale of the IESO this winter to green energy/wind interests. Previously IESO was the System Control Center of the old Ontario Hydro. They are the people who made sure generation matched load and bought and sold power and made sure your supply was secure on a second by second basis. They have now become the “inside arm” into the control of the power system and what type of generation it will use by the renewables. Their whole business plan has changed in full favour of the “green energy contingent” No one seems to be picking up on that, although it is more insidious than what you are suggesting with Hydro One.
Another thing on the confusion level. How many people who are complaining about Hydro One are actually supplied by local utilites (e.g. Toronto Hydro) who are subject to the same rules as Hydro One. they use SMART meters etc. They use the same technology. How many problems with them are beng transferred to Hydro One? I know from experience, many people don’t register a difference between Hydro One and their local utilities. Some thing to think about.

Barbara

May 29, 2015 at 11:19 am

OPA was “packed” with green interests as advisors and now merged with IESO with the same kind of “packed” green interests. These are government appointments.

This “packing” issue has been tracked over the last few years.

How does running down Hydro One fit with trying to get the best sale for it?

Sommer

May 29, 2015 at 12:32 pm

Your insights are valuable, John. I appreciate your help.

Behind the scenes is the financing issue of the ‘green agenda’. This story is unfolding and ties in with a global realization that is right now coming to the fore, and I believe it relates to how these wind companies have been financed.
It sounds like I’m changing the subject here, but I suspect there is a direct connection to the collateral issue which was discovered in Huron County. ‘Leaseholders may be on the hook for billions’.
Contracts that obfuscate the truth with bureaucratic language, which the average person does not understand, and perhaps even the average lawyer would not realize, are an example of the creation of ‘complexity’ in order to cover-up something.
This tactic is under scrutiny on many different issues. So, whenever I hear a politician use that response, I wonder…There job is to explain it as clearly as possible so that the average person understands. This is the transparency we are demanding of our paid and elected leaders. An informed citizenry is a prerequisite to functional democracy.

Barbara, I’m sure you;ll agree,, never underestimate your apponent. Because I see the leaders as “ecducated” doesn’t mean they are educated in a direction I want to go. The same can be said for “leaders” period.
They know what they are doing and how it’s effecting us, they just don’t care because they are backing (supporting) their own seedy adgenda and questionable supporters.

There is a different way to look at this, which is the way the Bay Street underwriters will sell it to investors. A well run company with a popular brand represents limited upside. The numbers are what they are and wouldn’t improve much after IPO. A poorly run company with incompetent management represents opportunities for significant improvements to the bottom line. Normally, any savings should be passed straight through to ratepayers in a regulated utility but based on Ed Clark’s hints, I believe we will see sticky fingers in order to sweeten the deal for new shareholders. I won’t help them by sharing my suspicions on how. There has been undue secrecy on this deal and I suspect the government will give away the store, privately, to maximize proceeds on sale. The union share giveaway, which will become extra taxpayer liability in the future, is already evidence of this.

Thanks for writing this information and for sharing your information in an open and honest discussion.

A number of people, Parker, Barbara, Ross McKitrick and others, are dissecting and documenting this “Green Energy” disaster. The mechanisms are complex, but the ideas themselves are simple. The point is there is no public benefit from Wind and Solar. On the contrary, there is significant harm, financial harm, human health, and nature.

It is interesting that the market design committee was active during the same period that Enron were considered geniuses and creating markets for power and making a ton of money (so it seems) from doing so. And like ‘economies of scale’, once an idea gets lodged in the heads of politicians they are pretty uncritical about the results. What I would be curious about, and really needs to be asked, is whether these transformations have provided the benefits to the citizenry that was ascribed to them? Or is it the case that private profit trumps all other considerations?